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Certificate of Insurance: What are They and Why Do They Matter

By Heather Brown
February 16, 2018

Residents that reside at assisted living facilities sometimes need additional care that is not provided by the facility. Physical therapy, dietician services, occupational therapy, and wound care are just a few of those services. When a nurse or other healthcare professional enters your adult residential care facility or assisted living home, there are risks involved. If your facility has gone through the tedious process of properly vetting third-party health professionals, requesting certificates of insurance may not be at the top of your list of questions to ask.

But, what about the health professionals that are hired by the resident’s family? Do they undergo a thorough investigation before entering the assisted living facility? And what happens if a mistake or error does occur? Will you be okay finding out that nurse, doctor, or therapist doesn’t have professional liability insurance in place? Requiring certificates of insurance is a simple way to gain a peace of mind.

What is a Certificate of Insurance?

A certificate of insurance is a formal document that evidences a health professional or another party that could increase your exposure(s) carries their own general and/or professional liability insurance. The certificate also includes policy details like effective date, coverage amounts, and the name of the insurance carrier. It is important to understand that certificates of insurance are not binding contracts. Unless you are listed as an additional insured on the policy, it can cancel at any time without you knowing.

When you receive certificates of insurance from third-party healthcare providers or other service providers, make sure you review the information to assure the policy is in effect and that they carry the required coverage and limits.

Why Do I Need Proof of Professional Liability Insurance?

Even if you know and trust the providers, it is crucial you require proof of insurance and are named as an additional insured. The truth is we live in a society that increasingly solves problems and disagreement with lawsuits. Since the additional services are being provided under your roof, an unhappy family member may be quick to include your facility in a lawsuit.

This one step keeps you from taking on the risk from the care they provide in your facility. Certificates of insurance protect you in several ways:

  • It reduces the chance of you being deemed responsible for poor or negligent care if the family decides to press charges as a result of the health provider’s actions.
  • It shows the third party has your assisted living facility listed as an additional insured on their policy which gives your extra protection if there is a claim or lawsuit.

Whether you have been requesting proof of insurance for years or this is a new venture, to make it worthwhile, you much be consistent. Create a system that tracks the expiration dates of these policies, even if it is a simple reminder on your calendar or smartphone, so you know when to request updated versions. Consistently enforced this requirement before any new third-party health professional provides care in your assisted living facility. In today’s litigious environment, it is better to be safe and protect the business you built than find yourself in the middle of a long, drawn-out litigation.

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